As we enter the final quarter of the year, the BIP Ventures State of Startups℠ in the Southeast Report. is back, offering a fresh, data-driven look at the region’s tech ecosystem. Since its debut in 2017, this annual report has become a go-to resource for breaking down regional investment and innovation trends, providing insight into deal flow, capital allocation, and the sectors gaining traction across the Southeast.
While venture capital has faced headwinds nationwide in 2024—with late-stage funding drying up and the impact of AI still uncertain—the Southeast continues to foster growth. This year’s report sheds light on where founders are thriving, the problems they’re tackling, and how the region’s startup scene is poised for what’s next.
What Founders and Investors Should Know
While we await the full report to drop, Mark Flickinger, BIP’s General Partner and COO, took some time to walk Hypepotamus through the major takeaways from the report and give us a little preview. His answers to our Q&A can help founders and investors alike get to know the report a bit better.
Here is a look at his answers to our questions about the 2024 report:
Question: With the 2024 State of Startups report, what data or trends have been most surprising to you so far?
Every year, when we dig into the information for the State of Startups℠ report, we uncover trends that are interesting–certainly for us–and sometimes surprising. Of course, we’re used to seeing what’s been widely reported about down rounds, less deals, and less capital being deployed. As we dug into the data this year, we’ve also started to see what hopefully, potentially could be the kind of recovery where good companies are being funded and median valuations seem to be ticking up after they flattened from 2023 to 2024. There are a lot of reasons to be optimistic as we finish out this year and head into next year.
Question: What do you hope that founders will take away from this year’s report?
For founders, the 2024 State of Startups in the Southeast report shows that there’s still a vibrant ecosystem here in the Southeast, for them to be founding, building, and scaling businesses. In the report we touch on a couple of different ways people are solving the capital challenges to be able to continue to fuel their business. Private credit is one solution that people are pursuing, along with deals that are still getting done from an equity perspective.
As you go through up cycles and down cycles, you can see the differentiated styles of investing between innovation centers like the Bay Area, New York, and Boston, versus how investments happen in the Southeast. Not to say one’s better than the other, but there are advantages with the strategy deployed in the Southeast, especially in times like we’ve been in for the past few years.
Question: What do you hope investors will take away from the 2024 report?
We always write the report for many audiences, but for investors, the takeaway for the 2024 report is especially important. Data shows that the activity in the private markets is something they should be aware of and should be participating in. There just are so many more companies in the private markets today than there were in the past.
The stat that we use is that 87% of the companies that have $100 million or more in revenues are private. Only 13 % of those companies are publicly traded. Investors need to be paying attention to and participating in the private markets. Reports like this help educate how and why.
Clarifying Question: What is important about that $100 million mark?
“A hundred million from a revenue perspective is relevant because it’s the sign of a really big company. It takes a long time for companies to get to a $100 million of revenue, and to only have 13 % of them that make it to that journey is a big deal. We’re talking about unicorns – companies that have billion-dollar businesses…call it 10 times revenue from a multiples perspective. It’s not that many businesses. But there are thousands and thousands of successful businesses that have $100 million dollars of revenue or less. That’s why that stat’s so high popping.”
Question: What are the most interesting opportunities for growth in the Southeast as we move forward from 2024?
Opportunities for growth exist on both sides of the table, both from the founder’s perspective and from an investor’s perspective.
From a founder’s perspective, it used to be that there were pockets of expertise in the Southeast. For example, you had to do Fintech if you were in Atlanta. As we see the ecosystem mature, we continue to see other verticals and types of businesses succeed. I think the data shows there’s a lot of room for us to continue with known industries, as well as extending into models like B2B or D2C. We aren’t limited to the focused areas that the South has been known for in the past.
On the investor side, everyone always says there’s not enough capital. I think at any time, good times and bad times, people say there’s not enough capital. I think what’s been exciting to see is there are a lot of new funds covering various stages of maturity for a business, whether it’s seed funds, Series A, know, growth equity, private equity. I think there’s always room for more people to come in and participate in this ecosystem. The rising tide floats all boats. If we have support at various stages of businesses, we can help these businesses stay in the Southeast, be successful and continue to grow and scale.
Question: Given what you’re seeing in the research, what are you hoping to see in the coming year?
Ah, the prediction question. What we are hoping to see in 2025 as we roll into Q4 of 2024 is the kind of early grass shoots we’ve seen as we’ve coming out of the trough. We’re seeing deals pick up, we’re starting to do a few more deals, and more dollars are getting deployed. I would hope to see us continue down that path.
I don’t hope that we get back to the height of everything we experienced in 2021 and 2022, but I think the pendulum has swung back and forth. The reaction to what happened in 2021 and 2022 swung a little bit too far in 2023. Hopefully, we’re swinging back to the middle and we’ll continue to see kind of the evolution of the ecosystem. We’ll have more deals, investments, more exits happening, more kinds of companies moving through the various stages of maturity, and it will benefit entrepreneurs and investors.
How To Get The Report
The report will be available online later this month, but registration is now up to receive early access to the insights.
The BIP team will also host a webinar on Monday, October 28 to discuss findings, trends, and implications from the report. Those interested in joining the webinar can find more information here.
